A unique market offering by formal independent retail and wholesale small businesses in the Soweto Township, South Africa.

Abstract

The rationale for this study is to determine how independent formal small retail and wholesale businesses compete against increasing competition mainly from large retail chains located in new shopping malls in Soweto. Soweto was one of the biggest segregated townships in South Africa during the apartheid era and in 2005 the City of Johannesburg focused on stimulating the economic activity of Soweto. The fundamental ways in which small and large businesses differ, influence the way they compete. According to literature businesses can compete within three competing disciplines, namely operational excellence, product leadership and customer intimacy. Each discipline consists out of a unique combination of elements known as price-related, product-related and customer service-related elements. This study investigates the sustainability of independent formal small retail and wholesale businesses in Soweto by identifying the unique market offering that they have to present to their customers to compete successfully in the market. The research was conducted by means of a questionnaire and personal interviews with a sample of 650 small businesses in Soweto. With this quantitative study, it was found that independent formal small retail and wholesale businesses that focused on product-related (product quality, product variety and best brands) elements in their market offering as the main competing discipline, tend to survive and grow.